Is it a great idea to shift funds from an Index fund into an ETF?

Given the fact that expense ratio's of Index funds have also double?!

Maybe not. Here's why-

Expense ratios of all Index Funds will be revised until 16th April. Most Index funds will have their expense ratios almost double!

However, in an ETF, we transact with unitholders, hence, here there would be significant NAV and price deviations (which usually aren't monitored efficiently), hence impacting the returns up to a certain extent every time you buy and sell.

Also, if you remember, an ETF price changed only by 0.2% when Nifty dropped by 7.6%. Hence, averaging out might not work in the case of an ETF as efficiently as in an Index fund.

So, instead of obsessing on shifting funds, stay put even though the expense ratio of an ETF would always be lower than an Index fund.

Ultimately, if AMC decides to change expense ratios for ETF, you wouldn't really be able to do anything.

Cheers!

#ETF #Investing #IndexFunds #PassiveInvesting

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